The growing trend in brands taking their content production in-house has prompted both agency partners and their clients to do some soul-searching. Growing at what feels like an exponential rate—78% of ANA member organizations have taken work in-house, according to an ANA webinar on agency partnerships—some have said that the trend is just a fad.

But is it? Not likely. Half of ANA member organizations work with an agency of record, according to the same webinar above, but only 14% are satisfied with the model. Experimenting with in-housing has the promise of releasing brands from frustrations they may feel with juggling several different partnerships and vendors, though their malleability—every brand’s IHA operates differently, after all—can make it tough to understand which setup works best.

With each organization taking a different approach to in-housing, what are the shared benefits to the trend, and where do traditional agencies fit within them? Tackling both these questions together will help brands ensure their IHA is equipped to support their unique needs.

Why Everyone is Going In-House

There are numerous factors that encourage brands to work in-house. A major one is the need to produce content faster; the proliferation of social channels and their always-on nature requires a constant stream of content for brands to retain relevance. The idea is that in-house agencies offer greater proximity to decision-makers in the organization and can therefore produce content at a greater speed than an external agency relying on briefs and back-and-forth feedback. Though whether an IHA achieves this is dependent on how well aligned and integrated it is with its organization’s business needs, and whether it has the talent or workflows in place to support rapid content production at scale—more on that below.

What IHAs do offer over the traditional agency model is extensive brand knowledge. Though this is a double-edged sword; wholly focused on the brand, in-house agencies often lack the broad experience that a traditional agency offers, which in turn can inhibit creativity. IHAs can enjoy the best of both worlds by tapping into new agency models that provide dedicated teams armed with broad, extensive creative experience.

And one can’t forget that in-house agencies can also save their organizations a significant amount of money. One of the key offerings of our sister company, MightyHive, is to help brands save by taking their media and programmatic in-house. The move not only saves them money, but offers transparency into a previously esoteric practice. As brands embark on taking on these new capabilities, partnerships will remain essential.

A Key Challenge for IHAs: Talent

Despite the benefits to in-housing outlined above, key challenges still remain for IHAs, especially those driven by a need for increased output of digital content. A shift to digital requires organizations to bolster their teams with new skillsets, and IHAs designed to support a growing need for digital content are likely to feel challenged in hiring and retaining this talent. Unilever CEO Alan Jope said as much in the Campaign article linked above: “It turns out that when you’re shifting directly and aggressively into digital, the constraint is not money in the [brand and marketing investment] line, it’s people to run the digital campaigns.”

This skillset gap is where in-house teams will continue to benefit from working with external partnerships, often organized into specific skill rosters. We have worked a lot alongside sportswear brand Adidas in platforms and digital activations, perhaps most notably with the brand’s Run for the Oceans initiative in collaboration with Parley.

The global run united nearly a million runners from around the world to raise money for educational programs benefiting those in coastal communities affected by plastic pollution. We lent our technical and creative expertise to build a web platform that pulled running data from partner apps like Joyrun and Runtastic, which we translated into a hypnotic WebGL visualization that grew and changed based on the number of participants and distance run over the course of the event.

The platform is unique for visualizing the initiative’s theme of unity—but not every experience requires a best-in-class WebGL experience, nor does every brand need to hire a WebGL developer. In this case, the technology fit the goal of the campaign very well—and by reaching out to a partner, Adidas was able to meet that one-off need with ease.

Brands Still Draw on Agency Knowledge & Experience

And while an IHA’s dedication to its brand is certainly a unique benefit, this often means sacrificing the breadth of experience provided by an agency or production partner, which can make it more difficult to support new technologies and formats. Unilever is no stranger to tapping partnerships to augment the creative capabilities of its in-house teams. For their Magnum sub-brand, we put together a Snapchat game that’s almost as addicting as the ice-cream bars themselves. We also produced a series of educational Facebook AR Camera Effects for Unilever’s Signal toothpaste brand, which teaches children healthy toothbrushing habits.

MediaMonks is a preferred partner for both Snap and Facebook platforms. The Signal Camera Effect was one of the first educational AR effects on Facebook Messenger, demonstrating the kind of innovations that IHAs can achieve by tapping into partners with a comprehensive understanding and experience in current and emerging digital platforms.

So, are Agencies Obsolete? Not with New Partner Models

As you might imagine from the shared challenges held by IHAs detailed above, agencies aren’t obsolete in the trend to go in-house. Rather, they must evolve their offerings into hybrid models that help “fill in the gaps” in their clients’ in-house capabilities. But there’s no simple answer to this; IHAs will each have different ways of integrating within their organizations, and might focus on different capabilities in the creative, production or media-buying processes. This is where partnerships can truly shine by offering more consultative services—like helping brands align their goals across the organization or achieve more agile workflows.

Partnerships can also solve the critical challenge of scalability. Resources are often tight within IHAs—but work is abundant. We saw this need in some of our clients, resulting in a partially in-house model that effectively allows clients to view us as extensions of their own teams, and dedicated content studios that make them achieve greater global and local relevance, like the one we made for Avon.

Given brands’ dissatisfaction with the traditional agency model, it’s clear that the shift in-house probably isn’t going away. In fact, it may just be the first step in an ongoing evolution in how agencies and clients can work with one another within a fast-changing digital environment.

As part of the recent WBR Digital Food & Beverage Summit, I moderated a panel discussion, “Digital Shelf 2.0: Best Practices for Winning in Digital Shelf.” The panel brought together leadership from across the CPG space—including Nestle USA, Coca-Cola Consolidated, Mondelēz International, and Crossmark—to discuss shifting content requirements and media needs as eCommerce rises in user adoption and relevance.

Winning the Digital Shelf is an Evolving Process

It’s no secret that eCommerce has enjoyed explosive growth over the past year, as the pandemic kept consumers at home: eMarketer reports that over half of internet users bought groceries online in 2020, and those who began investing in eCommerce years ago have managed to future-proof their business. Jie Cheng (Global Head of eCommerce & Direct-to-Consumer, Mondelēz International) noted that Mondelēz’s investment in eCommerce as far back as 2015 foundationally set the brand up for success in 2020, owing 6% of its global business to online sales. “Fortunately, we could capitalize on the tailwind of eCommerce and ramp up our investment quite significantly,” Cheng said.

For brands that are just dipping their toes into eCommerce now out of necessity, it’s important to realize you’re never too late to embrace the digital shelf—and as new platforms and needs arise, eCommerce should be treated as an always-evolving process. Following Mondelēz’s advances in the past year, Cheng and her team are road mapping where to go next. “The idea is, how can we continue to make sure we’re serving consumers where they are, and in the meantime make sure we are purposeful in how we approach different retailers, our D2C business or our eB2B business?” she said.

Educate and Future-Proof Teams

One of the greatest challenges in winning the digital shelf is allocating the resources needed to fulfill new customer needs. Upon leaning into eCommerce in 2016, Coca-Cola Consolidated—the largest independent Coca-Cola bottler in the US—began shifting some of its focus from the bottling side to instead focus on customers. “We had an account team mentality but saw all this volume shifting into different channels,” said Michaela Downes, whose role as Director of Channel Commercialization – Digital exists to integrate processes and educate people throughout the business on omnichannel strategy. “This wasn’t something from just a sales perspective, but rather: where are we going into the future?”

And while brands may build a digital shelf strategy around the consumer, Gloria DeCoste (Director of Digital Marketing, eCommerce, Nestle USA) noted the importance of supporting your employees as a step toward business transformation. “What do our career paths look like—ten years from now, can you be successful without knowing this world?” she asked. “We think about how we build the knowledge to make our people successful, which builds confidence in this new space. Build out the education.”

Realize Unique Challenges in CPG

As part of the WBR Digital Food & Beverage Virtual Summit, Cheng noted that the category is a totally different beast compared to other goods being sold online, with its own unique challenges. Shipping chocolate during summer months can be challenging, she mentioned, while snacks can be crushed in delivery unless packaging is sturdy—a reminder to consider not only how your brand shows up on digital platforms, but how delivery and fulfilment factor into the consumer experience.

Another critical example is replicating the impulse buy. “You need to work with your retail or last-mile delivery partners,” Cheng said. “We did a lot of test and learn pilot projects last year to offer consumers the right time before checkout, to remind them to add something to their cart or make a complementary purchase.”

Test and Learn—Then Combine Holistic

There’s no magic bullet for winning the digital shelf; what works for one brand doesn’t translate to guaranteed success for another. But Stephen Koven (Vice President, Omnichannel & eCommerce, Crossmark) recommends that brands first consider the specific goal they’ve set out to achieve, then use a “test and learn” approach to iterate their strategy. A great example of this is how many brands have been investing in direct-to-consumer platforms.

“Use DTC as a learning channel,” said Koven. “See how products perform, and capture where things are changing on the digital shelf.” Product reviews can be a great value-add because they offer social proof and help brands get into the mind of the consumer. On that note, such experimentations in DTC can rake in valuable insights. “Where is first-party or third-party data doing to land—and will third-party data be available in the future?” Koven said.

As brands build insights and apply learnings, they shouldn’t exist in a silo; DeCoste noted how increasingly, success on both the digital shelf and physical one is closely related. “We need to create products that simultaneously fulfill in-store and online demand,” she said. “We have an opportunity to build a new gold standard shelf and think about that throughout the organization.” Whether sharing knowledge across teams, adopting entirely new channels or reallocating resources, brands can set themselves up for success to win the digital shelf—and continually adapt to consumers’ ever-evolving need